Guatemala's coffee crop hit by killer fungus

GUATEMALA CITY, May 8 (Reuters) - A mutant strain of one of
the world's most devastating coffee diseases is attacking crops
in Guatemala, putting farmers on high alert for a wider outbreak
across Central America.

Growers are battling a new form of leaf rust fungus, or
roya, which kills leaves on coffee trees and makes the weakened
plants produce less.

Leaf rust usually infects coffee grown at lower altitudes
where it is hotter and wetter, conditions in which the fungus
thrives, but a new type is creeping up to higher, cooler areas.

That is a big worry for gourmet coffee roasters who rely on
arabica coffee grown in the mountains or on slopes of steep
volcanoes. Together, Central America and Mexico produce around a
fifth of the world's arabica, a higher-quality variety favored
by most top-end roasters such as Starbucks.

"We haven't seen leaf rust at this intensity ever before in
Guatemala," Ricardo Villanueva, president of Guatemala's coffee
growers' association Anacafe, told Reuters.

Nearly 40 percent of Guatemala's roughly 677,000 acres
(274,000 hectares) of planted coffee land has been affected by
the disease, he said.

Before the scale of the problem emerged, Anacafe estimated
Guatemala would produce 3.7 million 60-kg bags of coffee this
crop cycle, which began last October and ends in mid-2012.

Damage from leaf rust forced it to cut that estimate by 8
percent, or 300,000 bags, with the 2011/12 crop now expected to
come in at 3.4 million bags.

Smaller and medium-size farmers who cannot afford expensive
fungicides to treat the problem have been hardest hit.

"Last year there was a little bit, but this year all of a
sudden: boom," said Luis Zelaya, a Guatemalan coffee grower
whose farm is near the colonial city of Antigua, famous for
growing some of the best coffee in the world.

Zelaya will see a 15 percent drop in production in 2012 at
his medium-sized plantation because of the infection.

MUTANT

The more common type of leaf rust has existed in Guatemala
for decades, but serious outbreaks have been rare.

"We are seeing a mutation to a more aggressive variety of
the fungus," said Tomas Nottebohm, president of Guatemalan
coffee exporter Transcafe, who said the new strain may be
resistant to standard fungicides.

Two years of heavier-than-normal rains in Central America
created moist breeding grounds for the fungus, which can spread
on trees once they are infected.

Osorio said Nicaraguan coffee farmers do not know whether
the mutant form of roya has arrived at their farms since there
has been no national study. However, they are worried about what
is happening in Guatemala.

Neighboring El Salvador was battered by heavy rains last
October, which knocked ripe coffee cherries off trees and hit
production. Leaf rust so far is not a problem.

"For years, people haven't paid much attention to it because
the frequency was mild and the incidents were low," said Juan
Barrios from the Finca La Merced, an award-winning coffee farm
near Guatemala City. "It's been building up to a perfect storm."

The rust produces spotted, yellow-orange stains on the
coffee plants, making it easy to detect.

It can take up to three years to get rid of the disease with
chemical treatment and if fallen leaves are left on the ground
the rust can seep into the soil, causing longer-term damage.

More than a third of Carlos Torrebiarte's certified coffee
crop is infected on his farm near Lake Atitlan, in western
Guatemala. In the upcoming 2012/13 season, which begins next
October, his yield will likely fall 30 percent.

Torrebiarte lacks the means to buy enough fungicide, which
would cost him around $80 per 2.5 acres (1 hectare).

"We don't have the products or the tools to fight this
disease. The country's small and medium producers don't know
what to do," he said.

A strong leaf rust attack in Colombia in 2010 infested a
third of that South American nation's crop, prompting growers to
cut trees and replant with resistant varieties.

The world's No. 2 arabica producer missed production targets
for three consecutive years due to the rust.

Losses in Colombia roiled international coffee markets
scrambling for arabica supply and helped push coffee prices
to a 34-year peak at $3.0890 per lb in May 2011.

Prices have since dropped about 40 percent, hitting a
19-month low at the beginning of the week at $1.7360 per lb,
around levels that the market saw in the last half of 2010.

That leaves farmers with fewer resources to invest in
chemicals to wipe out the pest.

The region's coffee associations will meet in El Salvador
this month to discuss a 10-year, $3.3 million program to
research new types of coffee more resistant to leaf rust.

Discouraged by piles of debt, higher production costs and
drops in global coffee prices, few Guatemalan coffee farmers
have the resources to plant new trees.

"At these prices, no one is inspired to plant more coffee,"
Anacafe's Villanueva said. "Since 2008, we have been stuck."